GREAT insights Magazine

EPA Update July/August 2014

European Commission proposes to introduce time-bound flexibility for ratification of regional EPAs

According to our sources, the European Commission (EC) has transmitted a document to the European Parliament detailing steps that would allow regions having initialled an EPA to remain within the reach of Market Access Regulation 1528 (MAR 1528) during ACP countries’ domestic ratification processes.

MAR 1528 is the legal instrument granting ACP countries having concluded Interim EPAs (IEPAs) temporary Duty Free Quota Free (DFQF) market access to the European Union. It was introduced in order to avoid export disruption during implementations of the IEPAs and while broader EPA negotiations were ongoing. MAR 1528 was modified in 2011 so that countries having signed Interim EPAs but deemed to have taken insufficient steps towards ratification and implementation would be taken off the list of beneficiary countries. This is supposed to happen in October 2014.

The modification was widely seen at the time as a way to speed up EPA negotiations: countries would either have to stick to their IEPAs or complete new regional agreements by the “deadline” in order to maintain their DFQF export lines to the European Union.

Since then regional negotiations have sped up and several groupings are either close to concluding negotiations or have just concluded them.

Technically, however, these regional groupings will in all likelihood not have signed and ratified the agreement domestically by October 2014. Procedures to ratify international trade agreements differ from country to country, but can include passing it though domestic legislatures. This can sometimes take months, if not years.

The Commission’s proposal would add regional groupings having initialled a regional EPA to the list of MAR 1528 beneficiaries by way of a delegated act, on the basis of article 2.2 of the regulation.

ECOWAS leaders endorse the West Africa EPA

On July 10th 2014, the West Africa Economic Partnership Agreement (EPA) negotiating group became the first African region to officially conclude and endorse a regional EPA with the EU after ECOWAS Heads of States and Government officially endorsed the negotiated agreement at the 45th Ordinary Session of the Authority of ECOWAS Heads of States and Government.(1)

As we had reported throughout the past months, a technical compromise on several contentious points in the agreement had been found back in January, but Nigeria had refused to endorse the deal at a previous Heads of States and Government citing several “concerns” with the deal as it stood.

Since then, officials from Ghana, Ivory Coast, Nigeria and Senegal have met several times to review Nigeria’s concerns. It was agreed that some of the agreement’s clauses would be reviewed. It was also stressed that the agreement contained numerous flexibilities. It is unclear whether the agreement’s draft, finalised in January, has been amended to reflect these concerns.

The conclusion of the agreement follows nearly a decade of sometimes tense negotiations between the EU and ECOWAS – and between ECOWAS member states themselves. At stake was the unity of the African grouping, torn between members like Ghana and Ivory Coast and Nigeria. The former two had made securing their tariff reductions inherited from the previous Lomé conventions a priority, while Nigeria was wary of signing an agreement it saw as constraining its policy space and endangering its industrial base.

The approval is a good sign for regional integration in West Africa in so far as fragmentation has been averted. The Nigerian government seems to have made the decision that sticking to its regional neighbours, which had by now all agreed on the compromise text, was more important than rejecting an agreement it had deep reservations about.

With the initialling of the agreement, West African exports will be able to remain under MAR 1528, while the agreement should be ratified domestically (see above).

SADC concludes EPA negotiations

On 15th July 2014, EU and SADC Group Chief negotiators ‘initialled’ their Economic Partnership Agreement, becoming the second region, after West Africa, to conclude a regional deal.(2) The deal assures continuation of duty-free quota free market access for Botswana, Lesotho, Namibia and Swaziland and signs a significant improvement for South Africa, maintaining at the same time, the functional coherence of the Southern Africa Customs Union (SACU).

The deal also made significant strides in improving rules of origin, expected to facilitate intra-regional trade and industrialisation across countries in the southern and eastern African region. All pending issues have been resolved according to the press release.

The agreement marks a major improvement for South Africa in terms of market access, compared to its current trade regime with the EU, the Trade and Development Cooperation Agreement (TDCA) in terms of better access for some 32 agricultural products, increased quota for wine, sugar and ethanol and more favourable access for flowers, dairy products, and fruits, amongst others. In addition, South Africa and EU sealed a landmark deal on Geographical Indications, enabling South Africa to protect the names of wines and other special agricultural products.

Additionally, the Swazi(3) and Namibian press(4) have respectively reported that their Governments were taking immediate steps for initialling and ratifying the regional EPA. In South Africa, the text is expected to be submitted to Cabinet within the next two months, after its legal screening from South African authorities(5).

Similarly to West Africa, with the initialling of the text, SADC EPA group will maintain its market access on the EU market, pending the ratification process.

Cameroon moves to ratify its Interim EPA

Cameroon’s Senate and National Assembly have given the go ahead to President Paul Biya to ratify the interim EPA it concluded in 2009, according to an article by Jeune Afrique.(6)

As reported in these columns, Cameroonian newspapers had already relayed debates in Cameroon when it was rumoured that President Biya was in favour cementing the agreement concluded in 2009. Soon after trade ministers from the region had mandated to the regional secretariat to speed up regional negotiations.

Given the little progress that had been achieved in central African EPA negotiations however it was doubtful that the region could come to a full regional EPA by October 2014 or before.

It is unclear at this point whether European and Central Africa negotiators have met in the past months, or whether they will do so in the future.

EPA Calendar

July 23: Senior Officials level meeting, Kigali, Rwanda

Quentin de Roquefeuil is Policy Officer at ECDPM (This is Quentin’s last EPA Update for GREAT insights as he has accepted a new position at SAANA. The ECDPM team would like to thank him and wishes him all the best).